If you are a Maryland resident and have a tax balance you cannot afford to pay, you might be eligible for an installment agreement. A Maryland tax payment plan lets taxpayers make monthly payments until the debt is satisfied. However, the balance is subject to accruing penalties and interest.
Maryland residents have three options when it comes to setting up a payment plan. You can:
All requests should include your name and address along with the last four digits of your Social Security number, a phone number where you can be reached, and a notice number or case number. This can be found on your most recent correspondence from the comptroller’s office.
When you file your tax return, include payment for some portion of your balance. The more of your state taxes you are able to pay upfront, the smaller your monthly payments will be. Continue to make payments each month until your request for a payment plan is approved. Make sure you include your Social Security number and note the tax year in question so that your payments are correctly applied to your account.
Once the state processes your tax return and initial payment, you’ll receive a letter in the mail titled Personal Income Tax Balance Due Notice. This notice will outline available payment options and ask you to select from the list. If you are unable to afford any of the provided arrangements, call the numbers listed above to speak to someone at the Compliance Division to discuss other ways to settle your account.
In most cases, Maryland requires you to repay your balance within 24 months. This includes interest, which currently accrues at a rate of 11.5 percent, and any penalties you have been assessed. Late payment penalties can add up to a maximum of 25 percent of your total tax liability.
For example, if you owe $10,000 to the state, your monthly payment will be about $417 plus interest and penalties. If you owe more than $15,000, you may be asked to make a down payment of around 25 percent of the total balance before you will be enrolled in a payment plan.
With this type of payment plan, you authorize the state to make debits for your monthly payment directly from your checking account. The agreement allows you to specify the date on which the payment will be withdrawn from your account. Once your balance is fully repaid, debits are automatically canceled.
If monthly payments toward your tax debt will make you unable to afford basic living expenses, you may be able to apply for an Offer in Compromise. With this arrangement, the state agrees to settle your tax debt for less than the full amount you owe.
Even if you can’t afford to pay your balance, it’s important to communicate with the state and attempt to find a solution to your tax issues.
Collection actions by the state for past-due tax balances can include:
If you do not agree with the amount of tax assessed by the Maryland comptroller, you have the right to file an appeal. The easiest way to file your appeal is through the online hearing appeal request system established by the state. You can also email your appeal request to email@example.com or mail it to Comptroller of Maryland Hearings and Appeals Office, 301 West Preston Street, Room 315, Baltimore, Maryland 21201-2383.
After you file an appeal, you’ll have an informal meeting with a hearing officer from the Comptroller Office. You will receive a notice informing you of the scheduled date and time. Bring any documentation that proves that your taxes have been assessed in error along with a photo ID.
Following the appeal, the officer will issue a Notice of Final Determination with his or her decision. If you do not agree with the decision, you can appeal to the Maryland Tax Court within 30 days. You should seek representation from a qualified tax attorney.
State tax debt can have a serious impact on your business, your finances, and your overall quality of life. If you need help with your Maryland tax debt, visit Solvable today to get connected with well-reviewed companies that specialize in assisting taxpayers like you. Seek relief for taxes as well as student loan and credit card debt today.